Vancouver energy-efficiency program bombs

VANCOUVER -- An ambitious, but ultimately unsuccessful, social engineering experiment to encourage city of Vancouver homeowners to do energy-saving upgrades may have cost taxpayers more than $100,000.

The full extent of the loss won’t be known for a month or two while city staff evaluate the results of the pilot Home Energy Loan Program, the first of its kind in Canada.

But Sadhu Johnston, the deputy city manager responsible, acknowledged this week that the year-long project never met its expected target of 500 applications from homeowners and he isn’t sure the city should stay involved.

“We had limited uptake,” Johnston said. “We are kind of exploring whether the city is the right group to provide various financial incentives. To be honest, I am not really sure if we are or not.”

He refused to say how many applications were received, saying he was preparing a report for city councillors and wanted them to see those numbers first.

Two years ago, just before the November, 2011, election, the Vision Vancouver-majority council approved the loan program as part of council’s groundbreaking Greenest City Action Plan, which seeks to reduce Vancouver’s greenhouse gas emissions by 33 per cent from 2007 levels by 2020. Applications closed in late November, 2012.

The concept, dubbed HELP, called for participating homeowners to have an “energy audit” by federally licensed auditors, who would recommend the best methods for reducing the home’s carbon footprint. Homeowners could then select from a list of pre-approved contractors and apply for up to $10,000 in financing from Vancity Credit Union, the city’s partner. The amount was calculated after equipment rebates had been applied from partner utility companies, including FortisBC and BC Hydro.

The 10-year Vancity loan, with a fixed interest rate of 4.5 per cent, would be collected through the city’s annual property tax bill. Homeowners would save money over the long term by reducing their energy consumption, especially if natural gas and electricity prices continue to rise.

The city agreed to put up to $500,000 into a “loan loss reserve” as a guarantee against potential defaults. The Vancity Community Foundation put in another $1 million, which it received from an anonymous donor. The foundation also agreed to give the city a start up grant of up to $125,000. The city’s portion is in the bank collecting interest, Johnston said. Calls to the foundation for comment were not returned.

Had the program worked as well as city officials and politicians hoped it could, it would have led to as many as 3,000 homes a year being retrofitted with high-efficiency furnaces, hot water heaters, windows and insulation.

But the pilot program apparently never took off, despite intense marketing by the city. Last year, it gave a $102,000 contract to a Vancouver-based non-profit company, Light House Sustainable Building, to provide marketing and support for the program. It is unclear whether the Light House contract was paid from the start up grant or out of city funds, but it was issued by City Manager Penny Ballem’s office.

Gil Yaron, the senior business and policy adviser for Light House, said his group toured community centres and workplaces trying to drum up interest. He said some people suggested the interest rate, at 4.5 per cent, was too high. Others felt that the maximum loan amount, $10,000, was not worth extending over a 10-year period.

Johnston said it wasn’t for lack of trying.

“During that year we did a fair amount of marketing for it at Vancity offices and other places. We tried the best we could to make sure people got the message,” he said. “But to be honest, homeowners don’t typically expect the city to deliver a financing program. They expect it from their financing institution. So we’re kind of looking at it to see what role we might play in the future.”

Johnston said ultimately it may also have been the combination of dropping energy rates and a misjudged interest rate that made the program unpopular. He said the city’s costs were largely related to staff time used to administer the program, which was done as “part of people's jobs.”

Vision Vancouver Coun. Raymond Louie said he hasn’t seen any results of the HELP program yet, but he still believes it was a good project.

“I still maintain that the concept is a sound one, where we can provide some level of support to homeowners to retrofit their homes, make them more energy efficient and ultimately save them some money,” he said. “If in fact it shows us that it is not viable or that the direction we should be taking is another, then we did the prudent thing by making sure it was just a pilot and that we didn’t set it in place as a permanent program.”

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Vancouver energy-efficiency program bombs

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